Irrevocable trusts can be very powerful but also complicated estate planning instruments. In order to get the most out of your California irrevocable trust, you should work with a Pasadena area estate planning attorney to structure yours. An irrevocable trust needs to be carefully developed, managed and funded in order to get maximum benefits from tax and asset protection planning.
Both irrevocable and revocable trusts appoint a trustee to hold title to a property and that trustee has an obligation to use the property for the benefit of some other person known as the beneficiary. You give up additional control over assets in an irrevocable trust in exchange for asset protection and tax planning benefits. However, the trust maker of an irrevocable trust cannot themselves make changes to the trust after it has been formed, or transfer the property back out of the irrevocable trust.
A common misconception about irrevocable trusts is that simply transferring property into it will automatically protect that property from creditors or eliminate the possibility of federal estate tax. Although it is possible to achieve both these goals with a properly structured irrevocable trust, this is not automatic, and you must manage and fund the trust appropriately. You will also need to give up certain controls and rights. Working with an estate planning attorney in Pasadena is the best way to ensure you get all possible benefits and avoid potential challenges for your loved ones when structuring your estate.
